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HQ 223697


March 24, 1992

CON-6-CO:R:C:E 223697 PH

CATEGORY: ENTRY

Mr. Angel G. Gonzalez
President
Andrea Products Inc.
Post Office Box 11938
Caparra Heights, Puerto Rico 00922

RE: Products of American Fisheries; Entry; 9815.00.20, HTSUSA; 19 CFR 10.78

Dear Mr. Gonzalez:

In your letter of December 12, 1991, to the Carrier Rulings Branch, you requested a ruling on the qualification of your fishing operation for treatment as an American Fishery and the exemption from entry and duties of your fishery products under subheading 9815.00.20, Harmonized Tariff Schedule of the United States Annotated (HTSUSA), and section 10.78, Customs Regulations (19 CFR 10.78). Your letter has been forwarded to this Division for direct response. Our ruling follows.

FACTS:

You state that your fishing operation uses two vessels registered in Miami, Florida, to fish in the eastern part of the Caribbean Sea. Your main catch is conch. You state that you transfer your catch in the port of San Maarten, Netherlands Antilles, and that the catch is placed in a refrigerated trailer owned by an American company. You state that the transfer is "done directly by the personnel of [your] vessels." You state that no changes are made to the catch and usually it is sent the same day or the next day to San Juan, Puerto Rico.

You state that currently, U.S. Customs in San Juan is requiring you to make an entry and is also charging you United States duties. You ask if your operations are covered by the provisions in subheading 9815.00.20, HTSUSA, and 19 CFR 10.78.

ISSUES:

(1) Are conch, taken by vessels of the United States and landed and transferred to a refrigerated trailer in a foreign port from which the conch are transported to the United States without change in condition, products of an American fishery and free of duty under subheading 9815.00.20, HTSUSA?

(2) May the conch described in ISSUE (1) above be exempt from consumption entry under 19 CFR 10.78?

LAW AND ANALYSIS:

Under subheading 9815.00.20, HTSUSA--

Products of American fisheries (including fish, shellfish and other marine animals, spermaceti and marine animal oils), which have not been landed in a foreign country, or which, if so landed, have been landed solely for transshipment without change in condition [are free of duty].

Under the U.S. Notes to the subchapter of the HTSUSA which contains subheading 9815.00.20 (Subchapter XV of Chapter 98), an "American fishery" is defined as "a fishing enterprise conducted under the American flag by vessels of the United States on the high seas or in foreign waters in which such vessels have the right ... to take fish or other marine products and may include a shore station operated in conjunction with such vessels by the owner or master thereof" (U.S. Note 1). Also under these U.S. Notes, fish, fresh, chilled or frozen, in the form of fillets, steaks or slices substantially free of bone, if produced in a foreign country or its territorial waters in whole or in part with the use of the labor of persons who are not residents of the United States may not be classified under the provisions in the subchapter (U.S. Note 2).

Subheading 9815.00.20, HTSUSA, and the other subheadings and U.S. Notes in Subchapter XV of Chapter 98 are the successors to a long line of provisions providing duty-free treatment for the products of American fisheries (see, e.g., Revised Statutes, title 33, section 2505; paragraph 1630, section 201, Act of September 21, 1922 (42 Stat. 929); paragraph 1730(a), section 201, Act of June 17, 1930, 46 Stat. 679; item 180.00, Tariff Schedules of the United States (TSUS), and headnotes to Schedule 1, Part 15, Subpart A, TSUS (19 U.S.C. 1202)). These provisions have been the subject of a number of Court decisions (see New England Fish Co. v. United States, 15 Ct. Cust. App. 34, Treasury Decision (T.D.) 42137 (1927), holding that fish caught by Americans in American vessels and bought by a Canadian subsidiary of an American corporation, landed, graded, and packed in Canada and immediately shipped in bond to the American corporation without Canadian duty having been paid or having entered Canadian commerce qualified as products of an American fishery; see also Deming & Gould Co. v. United States, T.D. 44126 (Cust. Ct. 1930), and United States v. Holler, 28 CCPA 105, C.A.D. 132 (1940), and 28 CCPA 124, C.A.D. 133 (1940)). (See T.D. 40089 (1924), cited in the New England Fish Co. case, supra, under which freezing fish or packing them in ice in order to keep them in a fresh condition for shipment was not a bar to free entry under the 1922 predecessor to the provision; see also, the thorough discussion of the predecessor of this provision in the Tariff Act of 1930 (as amended by the Act of June 11, 1940, 54 Stat. 305) in the Summaries of Tariff Information (1950), vol. 16, pp. 13-20.)

The Customs Regulations issued under the authority of these tariff provisions are found in 19 CFR 10.78. Under paragraph (a) of section 10.78, no entry is required for fish or other marine products taken on the high seas by vessels of the United States or by residents of the United States in undocumented vessels owned in the United States when such fish or other products are brought into port by the taking vessel or are transferred at sea to another fishing vessel of the same fleet and brought into port. Paragraph (d) of section 1078 provides for the duty-free entry of products of an American fishery which have been processed at sea by the master or crew of the fishery or under the supervision of the master or owner of the fishery. Paragraph (d) also provides for the duty-free entry of fish (with certain listed exceptions) which are the product of an American fishery and which have been landed in a foreign country and there subject only to limited processing.

We assume, for purposes of this ruling, that the vessels in this case are vessels of the United States (see 46 U.S.C. chapter 121, particularly sections 12101(a)(1) and 12108) and that the conch are caught on the high seas or in foreign waters in which the vessels have the right to take them. We note that conch are shellfish (see Webster's Third New International Dictionary (1986), "conch", "mollusk", "shellfish"; see also subheading 0307.91.00.30, HTSUSA). If the foregoing assumptions are correct, the conch would be considered products of an American fishery, under subheading 9815.00.20, HTSUSA, and would be free of duty if they were brought to the United States without being landed in a foreign country. If the conch were landed in a foreign country, they would still be considered products of an American fishery, provided that they were landed solely for transshipment without being changed in condition. You state that that is true in this case (i.e., that they are landed in the Netherlands Antilles solely for transfer and that no changes are made to the catch). Therefore, if the facts are as you describe them and as described in the FACTS portion of this ruling, the conch qualify for duty-free treatment as products of an American fishery under subheading 9815.00.20, HTSUSA.

Even if the conch qualify for duty-free treatment under subheading 9815.00.20, HTSUSA, they are not exempt from entry. Section 10.78(a) of the Customs Regulations only exempts from entry fish or other marine products taken on the high seas by vessels of the United States when the fish or other products are brought to a United States port by the catching vessel or another fishing vessel of the same fleet to which the fish or other products were transferred at sea. That is not the case in this instance (i.e., the conch are landed in a foreign port, rather than being transferred at sea to another fishing vessel of the same fleet and the conch do not appear to be brought to a United States port by a fishing vessel of the same fleet as the catching vessel).

Because the conch are not specifically exempt from entry, they are required to be entered (see section 141.4, Customs Regulations (19 CFR 141.4). However, you should be aware that, assuming that the conch qualify for duty-free treatment under subheading 9815.00.20, HTSUSA (as discussed above), the entries of the conch are exempt from the 0.17% ad valorem merchandise processing fee provided for in 19 U.S.C. 58c(a)(9)(A) (see 19 U.S.C. 58c(b)(8)(B)(i) and 19 CFR 24.23(b)(1) under which this fee may not be charged for the processing of any article that is provided for in chapter 98, HTSUSA (with certain exceptions not applicable in this case)).

HOLDINGS:

(1) Conch, taken by vessels of the United States and landed and transferred to a refrigerated trailer in a foreign port from which the conch are transported to the United States without change in condition, are products of an American fishery and free of duty under subheading 9815.00.20, HTSUSA, provided that the taking vessels are vessels of the United States, that the conch are caught on the high seas or in foreign waters in which the vessels have the right to take them, and that the conch are actually landed in the Netherlands Antilles solely for transshipment without being changed in condition.

(2) The conch described in ISSUE (1) above are not exempt from consumption entry under 19 CFR 10.78, although if they qualify for classification under subheading 9815.00.20, HTSUSA, they are exempt from the merchandise processing fee provided for in 19 U.S.C. 58c(a)(9)(A).

Sincerely,

John Durant, Director

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